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Black Friday Report: For Amazon, The Kindle Is No Longer King

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By Douglas A. McIntyre Updated Published
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The Kindle was not the Amazon.com (NASDAQ: AMZN) flagship product much of Black Friday. Perhaps that is because of suspicions that the world’s largest e-commerce site makes little or no money on the device.

The ability to buy the company’s e-books and read them on a large array of devices was the major homepage promotion at Amazon.com for the busiest shopping day of the year.. The company’s free reader apps for the Apple (NASDAQ: AAPL) iPhone, Microsoft (NASDAQ: MSFT) Windows, Mac, Research In Motion (NASDAQ: RIMM) Blackberry, iPad, Google (NASDAQ: GOOG) Android, and Windows Phone 7 are part of the company’s push to diversify away from the Kindle, if the homepage marketing message is any indication.

The ad even says, “Download and read Kindle books – no Kindle required.” It also remarks on Amazon’s 750,000 e-book titles, but even that is only in the fine print of the promotion.

Investors are concerned that Amazon has dropped the price of the Kindle so low that it is a loss leader for the firm’s e-book operation which is likely very profitable. The Kindle with Wifi only costs $139. The version with both Wifi and 3G retails for $189. Some experts believe the bill of material is greater than $100.

Amazon said on November 8 that starting on December 1 publishers will earn 70 percent of the retail price minus delivery costs for each newspaper or magazine sold in the Kindle store. But, the e-commerce firm has few if any costs beyond that. So, there is little question that the Amazon.com e-book library makes money.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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